The annual Jackson Hole conference of the Federal Reserve starts today! If you’re a little under-enthusiastic, it’s OK. There’s a lot going on, what with the State Fair, back to school preparations, and the fact that hardly anyone cares what the Fed is up to.
Except, that is, more people all the time. The mysterious workings of the Fed have come under a lot of scrutiny lately – from left, right, and center. The most powerful bank in the world does indeed control more of our destiny than many otherwise free people would like, and that’s worrying.
The Fed knows this, of course. They also know that in an era of dysfunctional government and globalism they have more power all the time – as well as more responsibility to get it right. Will there be a new, more open Fed? The answer, a very strong “Yes!” may surprise you.
The decline in productivity, first noted 15 months ago, is starting to become a serious issue. It is true that an increase in GDP is most likely and most sustainable when the output for every worker constantly goes up. But over the last year, we’ve had a sustained drop of 0.4% annualized.
The message is starting to creep into popular media. A scapegoat now has to be found, lest our politics actually focus on something real and useful. The blame for this decline now falls on smartphones – especially in the hands of those slacker Millenials.
Those kids! They just won’t get off our lawn. Or put down their phones and start mowing it, something like that. We’re never sure. What we do know is that rather than discuss economic trends we now have someone to blame so we can divert our attention from reality. This is just in time for the problem to solve itself.
I’m going to repeat this one from a year ago with no changes because I think some things are going the way Mason predicted – manufactured goods are more commoditized than ever.
Are you ready for a Post Capitalist world? Paul Mason, an economist and columnist for the Guardian, has outlined what that might mean in his book Postcapitalism: A Guide to Our Future. The premise of this provocative subject is simply that information technology has a tendency to commoditize everything in our lives and ultimately push the value to zero, rendering concepts of money and markets as we understand them today utterly useless.
No one actually lives in a post-anything world, so the question becomes less about capitalism and more about what might come afterward. Financial writers, far from dismissal of the potential downfall of their trade, are actually quite excited by the concept of a new world where the old rules do not apply. The traditional left, steeped in a quasi-Marxist dialectic, are far more unsure.
That’s what makes this concept exciting.
Left or right? Democratic or Republican? Progressive or Conservative? These are the choices we supposedly make as we consider our political philosophy – our outlook on the nation and how we vote. It’s one end or the other, with a fair amount of room in the middle for those who see room for both.
But that doesn’t seem to be what divides us politically anymore. The sharpest division seems to run between something like optimism and pessimism, either staying the course with a few tweaks or smashing the system to give room for something totally new to come along. Yet even that doesn’t seem to describe it.
Perhaps you’re hearing a lot of gloom and/or doom about the economy. Most of it is pretty easy to refute, as Barataria has shown. There is every reason to say that we are indeed turning a corner into next year and that Spring is Coming.
Could there be any more good news? Of course there is. Let’s talk about energy independence and the lingering trade deficits that have been plaguing this nation since about the mid 1970s. Could it be that we’re about to slay at least one of the 40 year old demons that has defined the United States for as long as nearly half of today’s voters have been alive?
There’s no doubt that the United States is in a period of transition. But from what to what else? Through the last 16 years the economy has been tough on everyone – except the very wealthy. The most recent few years have been a time of terrible social upheaval. Pessimism is understandable.
Yet if we look back through history there is a lot of good reason to believe that everything does move in cycles. Business cycles which seem permanent eventually give way to better opportunity. Social upheaval does usually reach a consensus and progress is made.
Hope comes naturally by taking the Barataria view that cycles are real and that the economy is really nothing more than a social arrangement. Sure, it’s the dismal one with all the numbers and the brutal one that defines rich and poor. But at the heart it is only about turning our personal “values” into a socially convertible “value”. How it changes through generations and lifetimes defines us even as we define what this thing called an “economy” really is.
This essay is a continuation of the previous piece, Spring is Coming! as a cycle on my personal political philosophy and read of history.
In the heat of the summer start to the Presidential campaign, it’s hard to remember that we’re really still in Winter. That’s in economic terms, as the cycles of the seasons last for years rather than a few months. There’s a good reason people are as angry as they are. This Winter has been long and brutal.
Then again, as Barataria has pointed out before, things are very much warming up. Employment is up like the first tulips of Spring and most of the signs are very positive. But it doesn’t feel that way to many people. As sure as the arrival of Spring often comes with a few storms it seems darker before it all clears up.
Spring is coming. If you pause for a moment and reflect you can feel it. But that doesn’t mean it’s time to just sit around and wait. If you ask any gardener or farmer, Spring is the season with the most work. To get it done, there is no doubt that we are stronger together – that many hands make light work. More importantly, what we harvest is what we plant now. There’s a lot to do, but plenty of reasons to do it joyfully.